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Merchandising: Purchase Discounts, Purchase Returns, Purchase Allowances - Accounting video
 
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A purchase discounts and purchase returns and allowances example. Other videos in this series: Part 1 - Operating Cycle, Inventory, and Purchase Discount Terms Part 3 - Selling Inventory Part 4 - Adjusting and Closing Part 5 - Income Statements and Business Evaluation For more accounting/how to eLectures (and accompanying lecture notes), blog and a discount textbook-store visit www.TheAccountingDr.com Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad).
Gross vs Net Method of Accounting for Sales Discounts
 
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This video shows the difference between the gross method and the net method of accounting for Sales Discounts. Some companies offer discounts to customers for paying their bill within a specific period of time. It is very common to see, "2/10, n/30" on a bill, which means the customer will receive a 2% discount off the sales price if the bill is paid within 10 days, but if the bill is not paid within 10 days then the entire amount is due within 30 days. A company can account for these sales discounts using either the Gross Method or the Net Method. Under the Net Method, we assume that the customer will receive the discount when we initially record the sale. Thus, we record Sales Revenue and Accounts Receivable as if the customer had taken the discount. If the customer does end up paying early and getting the discount, we simply debit Cash for the amount received and credit Accounts Receivable for the same amount. If, however, the customer does not end up receiving the discount, they will pay more than we initially recorded. We debit Cash for the full balance (without the discount) and credit the receivable. To make the debits and credits balance, we credit an account called "Other Income" or "Sales Discount Forfeited" or "Interest Revenue." Under the Gross Method, we do not assume that the customer will receive the discount when we initially record the sale. Thus, if the customer doesn't receive the discount and pays the full amount, we simply debit Cash for the amount received and credit Accounts Receivable for the corresponding amount. If the customer does end up receiving the discount, however, we debit Cash for the amount received and credit Accounts Receivable. To make the debits and credits balance, we also debit an account called Sales Discounts. Sales Discounts will then be subtracted from Gross Sales on the Income Statement to yield Net Sales. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like Edspira on Facebook, visit https://www.facebook.com/Edspira To sign up for the newsletter, visit http://Edspira.com/register-for-newsletter Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin To follow Michael on Facebook, visit https://www.facebook.com/Prof.Michael.McLaughlin
Views: 14551 Edspira
Purchase Discounts and Discount Terms | Accounting | Chegg Tutors
 
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Purchase discounts are reductions in the amount paid for purchases due to payment within the discount terms. For instance, if the terms were 2/10 net 30, a 2% discount would be applied to the total cost of merchandise purchases if payment was made within 10 days, otherwise payment would be due within 30 days. Purchase discounts can be accounted for on the books using the gross or net methods. Discounts on purchases only apply to the costs of the merchandise, shipping costs wouldn't be eligible for a discount. ---------- Accounting tutoring on Chegg Tutors Learn about Accounting terms like Purchase Discounts and Discount Terms on Chegg Tutors. Work with live, online Accounting tutors like Jayson L. who can help you at any moment, whether at 2pm or 2am. Liked the video tutorial? Schedule lessons on-demand or schedule weekly tutoring in advance with tutors like Jayson L. Visit https://www.chegg.com/tutors/Accounting-online-tutoring/?utm_source=youtube&utm_medium=video&utm_content=managed&utm_campaign=videotutorials ---------- About Jayson L., Accounting tutor on Chegg Tutors: Western Michigan University, Class of 2013 Accounting major Subjects tutored: Accounting TEACHING EXPERIENCE I've tutored for approximately 4 years, covering a wide range of accounting and finance issues from cost accounting to npv analysis. I'm very logical so my teaching tends to reflect that. In addition, I tend to be more concrete in teaching (rather than abstract), which can help quite a bit when an equation doesn't quite make sense. My goal with tutoring is to lay the problems out simply and quickly so that students understand and remember the processes behind the answers. EXTRACURRICULAR INTERESTS I enjoy biking, hiking, chess, frisbee golf, a little bit of everything. Want to book a private lesson with Jayson L.? Message Jayson L. at https://www.chegg.com/tutors/online-tutors/Jayson-L-2498180/?utm_source=youtube&utm_medium=video&utm_content=managed&utm_campaign=videotutorials ---------- Like what you see? Subscribe to Chegg's Youtube Channel: http://bit.ly/1PwMn3k ---------- Visit Chegg.com for purchasing or renting textbooks, getting homework help, finding an online tutor, applying for scholarships and internships, discovering colleges, and more! https://chegg.com ---------- Want more from Chegg? Follow Chegg on social media: http://instagram.com/chegg http://facebook.com/chegg http://twitter.com/chegg
Views: 1739 Chegg
Merchandising Operations: Operating Cycle, Inventory, Purchase Discounts - Accounting video
 
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Discussion of the operating cycle, inventory, purchase discount terms Accompanying lecture notes: http://tiny.cc/nw1enw -- Thank you all for your wonderful support. Because of your support we have been able to reach and help numerous accounting students all over the world. Please continue to be a part of our mission to help other accounting students be successful by giving our videos thumbs up, adding our videos to your favorites and subscribing to our YouTube channel (click on more info on the videos). Subscribe: http://www.youtube.com/subscription_center?add_user=routhwsuedu Friend me on Facebook: http://www.facebook.com/TheAccountingDoctor -- Part 2 - Purchase Discounts and Purchase Returns and Allowances Example Part 3 - Selling Inventory Part 4 - Adjusting and Closing Part 5 - Income Statements and Business Evaluation For more accounting/how to eLectures (and accompanying lecture notes), blog and a discount textbook-store visit www.TheAccountingDr.com Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad).
IGCSE Accounting - Trade Discount and Cash Discount
 
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This video explains how to record trade discount and cash account in accounting
Views: 24772 Rakesh Kabra
Accounting for Sales and Purchase Discounts
 
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Credit terms such as 2 10 n 30 and the journal entries to account for discounts under the 2014 revenue recognition changes
Views: 1896 Cheri Bergeron
Accounting for Purchases Perpetual Inventory Financial Accounting FAR Exam
 
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Webiste: www.farhatlectures.com Like us on Facebook: https://www.facebook.com/accountinglectures Visit the website where you can search using a specific term: http://www.farhatlectures.org/ Connect with Linked In: https://www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-2453423a/ II. Accounting for Merchandise Purchases The invoice serves as a source document for this event. A Purchases without Cash Discounts. 1. Entry to record purchase: debit Inventory, credit Cash or Accounts Payable. 2. Trade Discounts: deductions from list price (catalog price) to determine the invoice price (actual selling price). Trade discounts are not entered into accounts. B. Purchase With Cash Discounts 1. Credit terms describe cash discounts offered to purchasers by seller for payment within a specified period of time called the discount period. 2. Cash Discounts- granted by the seller to encourage buyers to pay the amount they owe earlier. Buyers view cash discounts as purchase discounts and sellers view them as sales discounts. 3. Example: credit terms, 2/10 n/30, offer a 2 % discount if invoice is paid within 10 days of invoice date, if not full payment is due within 30 days of invoice date. 4. Entry for buyer for purchase using full invoice, gross method is: debit Merchandise Inventory and credit Accounts payable. 5. Payment within Discount Period: debit Accounts Payable (full invoice amount), credit Cash (full invoice – discount), credit Inventory (amount of discount). 6. Managing Discounts: Missing out on cash discounts can be very costly. A system should be set-up to ensure that all invoices are paid on the last day of discount period. 7. Payment after Discount Period: debit Accounts Payable and credit Cash. C. Purchases with Returns and Allowances 1. Purchase allowances is a reduction in the cost of defective merchandise that a buyer acquires. 2. Purchases returns are merchandise a buyer acquires but then returns to the seller. 3. A debit memorandum informs the seller of a debit made to the seller’s account payable in the buyer’s records. 4. Entry on buyer’s books: debit Accounts Payable or Cash (if refund given) and credit Inventory. 5. Discounts can only be taken on the remaining balance on the invoice if a return is made before payment is made. D. Purchases and Transportation Costs - the point at which ownership is transferred (called FOB or free on board). Determines who is responsible for paying any freight costs and/or bearing any loss. Two alternative points of title transfer are: 1. FOB shipping point—title transfers at shipping point and buyer pays shipping costs. a. Increases cost of merchandise (cost principle) b. Debit Inventory, credit Cash or Accounts Payable (if to be paid for with merchandise later) 2. FOB destination—title transfers at destination and seller pays shipping costs. a. Operating expense for seller b. Debit Delivery Expense and credit Cash.
Purchase Price in M&A Deals: Equity Value or Enterprise Value?
 
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In this tutorial, you’ll learn why the real price paid by a buyer to acquire a seller in an M&A deal is neither the Purchase Equity Value nor the Purchase Enterprise Value… exactly. http://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Table of Contents: 4:29: Problem #1: The Treatment of Debt 8:03: Problem #2: The Treatment of Cash 11:45: Recap and Summary Common questions: “In an M&A deal, does the buyer pay the Equity Value or the Enterprise Value to acquire the seller?” “What does it mean in press releases when they say the purchase consideration ‘includes the assumption of debt’? Does that mean the price is the Enterprise Value?” The Basic Definitions Equity Value: Value of ALL the company’s assets, but only to common equity investors (shareholders). Enterprise Value: Value of ONLY the core business operations, but to ALL investors (equity, debt, etc.). So when you calculate Enterprise Value, starting with Equity Value… Add Items When: They represent other investors (Debt investors, Preferred Stock investors, etc.) or long-term funding sources (Capital Leases, Unfunded Pensions) Subtract Items When: They are not related to the company’s core business operations (side activities, cash or excess cash, investments, real estate, etc.) The Confusion The problem is that many sources say Enterprise Value is what it “really costs to acquire a company.” But that’s not exactly true – yes, sometimes Enterprise Value is closer, but it depends on the deal terms and the items in Enterprise Value. We know, WITH CERTAINTY, that if you acquire 100% of a company, you must pay for 100% of its common shares. So the Purchase Equity Value is sort of a “floor” for the purchase price in an M&A deal. But should you really add the seller’s Debt, Preferred Stock, and other funding sources, and subtract 100% of the seller’s cash balance to determine the “real price”? There are many problems with that approach, but we’ll look at two of them here: PROBLEM #1: Does Debt really increase the purchase price? It depends, because debt can be either “assumed” (kept) or “refinanced” (replaced with new debt or paid off). Debt is Assumed: Does not increase the amount the buyer “really pays” for the seller. Debt is Repaid with the Buyer’s Cash: Does increase the amount the buyer “really pays”. Existing Debt is Replaced with New Debt: Increases the amount the buyer “really pays,” but the buyer still isn’t paying more cash. PROBLEM #2: Does Cash really reduce the purchase price? A buyer can’t just “take” a seller’s entire cash balance following a deal – all companies need a certain “minimum cash balance” to keep operating, paying the bills, etc. That portion of cash is actually a core business operating asset. Enterprise Value: As a simplification, we ignore the minimum cash and subtract all cash instead. So if a company operating by itself always needs some minimum amount of cash, it certainly still needs a minimum amount of cash in an M&A deal. Other Complications Transaction Fees: These always exist, and will always increase the price the buyer pays (lawyers, accountants, bankers, etc.). Unfunded Pensions, Capital Leases, etc.: These don’t necessarily have to be “paid” or “repaid” upon change of control… so they may not even affect the price, even though they factor into Enterprise Value. Extra Cash: What if the buyer’s cash + seller’s cash are used to fund the deal? Then the real price paid may not even be comparable to the seller’s Equity Value or Enterprise Value. The Bottom Line You have to distinguish between the *valuation* of a company or deal and the *actual price paid*. Equity Value and Enterprise Value are useful for valuation, but less useful for determining the real price paid. The real price paid may be between Equity Value and Enterprise Value, above them, or even below them, depending on the terms of the deal – due to the treatment of debt and cash, fees, and liabilities that don’t affect the cash cost of doing the deal. When you see language like “Including assumption of net debt,” that means the approximate Purchase Enterprise Value for the deal, because they are calculating it as Purchase Equity Value + Debt – Cash. But it’s still not what the buyer actually pays – it’s just a way to value the deal and get multiples like EV / EBITDA. RESOURCES: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-10-Purchase-Price-MA-Deals.pdf
Accounting - Current Liabilities - Accounts Payable - Purchase Discounts - Severson
 
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See the below link for more resources, including as a list of all of my videos, practice exercises, Excel templates, and study notes. https://www.dropbox.com/s/09hdhag3zieyt08/Severson%20YouTube%20Videos.xlsx?dl=0 This video discusses the topic of current liabilities (i.e. short term.) We discuss the reasons for this classification, what types of liabilities would be classified as such, how to analyze them, and how to handle various calculations and journal entries related to them. This also includes a discussion of accounts payables, and purchase discounts reported under the gross and net methods.
Basics of Accounting :- Types of Discount, Journal entries of Discount
 
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Discount क्या होता है Discount की journal entries कैसे करते है
Views: 4513 Suresh Makwana
Discounts, Premiums and Bonds at Par (Intermediate Financial Accounting Tutorial #12)
 
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Before we moved onto valuing and reporting long term bonds I thought that I would provide a quick summary of bonds issued at a discount, premium or at par. The stated rate is also known as the coupon rate, or face rate. The market rate is also known as the effective rate and is the rate at which you can get other very similar or identical financial instruments (for example, a bond may have been issued at a 4% coupon rate, 1 year later the market rate for those bonds might have shifted to 6%). Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-Pirate/514933148520001?ref=hl Follow us on Twitter: https://twitter.com/notepirate We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites! ** Notepirate is privately owned and exclusive to Notepirate.com.**
Views: 37805 Notepirate
Selling Inventory; Sales Returns, Sales Allowances, Sales Discounts - Accounting video
 
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Discussion on the selling of inventory: the journal entries recorded as well as a short review on sales returns and allowances and sales discounts as well as F.O.B., freight-in, freight-out, and delivery expense. Other videos in this series: Part 1 - Operating Cycle, Inventory, Purchase Discount Terms Part 2 - Purchase Discounts and Purchase Returns and Allowances Example Part 4 - Adjusting and Closing Part 5 - Income Statements and Business Evaluation For more accounting/how to eLectures (and accompanying lecture notes), blog and a discount textbook-store visit www.TheAccountingDr.com Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad).
Quickbooks Four: Discount Taken on Purchase
 
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This video explains how to use QuickBooks to manage vendors, purchases, write checks, and how to process purchase discounts. For live CPA exam prep and accounting classes, join Conference Room for free: https://conference-room.mn.co/feed Members will be notified of course dates, times, costs, and how to attend these courses. Get your questions answered to pass the CPA exam, and to learn accounting concepts. Go to Accounting Accidentally for 300+ blog posts and 400+ You Tube videos on accounting and finance: https://www.accountingaccidentally.com/
Views: 8619 AccountingED
Trade Discount Vs Cash Discount (With An Example)  Accounting Treatment in Tally ERP.9
 
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Explained about trade discount vs cash discount and how to post entries in Tally ERP.9
Views: 14381 Wisdom Tally
Purchase Entry In Busy Accounting Software Part 3 Freight, Cartage, Discount, Courier
 
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Purchase Entry In Busy With Freight, Cartage, Courier, Discount Example This Is Third Part Of purchase Entry In Busy Accounting Software
Views: 4172 ABN FAST
Accounting - Merchandise Purchase Transactions
 
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How do you handle purchases, purchase returns, purchase discount
Views: 1696 Kippi Harraid
Business & Accounting Terms : How to Define a Purchase Discount
 
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A purchase discount is an inducement for early payment provided by vendors to people or customers who pay bills ahead of time. Get a percentage off of a purchase pay back by paying in a timely fashion with advice from a certified public accountant in this free video on accounting terms. Expert: Henry Gutter Bio: Henry Gutter is a certified public accountant located in El Segundo, Calif. Filmmaker: Mark Labbato
Views: 314 eHow
GST Accounting Entries Discount Paid/Discount Received/Debit Note/Credit Note Tally.erp9
 
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Learn GST accounting entries of Debit note credit note For Sales return and purchase return in Tally.erp9. Accounting entries in the case of Less quantity goods received by supplier.and higher price bill made by supplier.
Views: 65137 TALLY ONLINE CLASS
Accounting Course - Purchase Discounts
 
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http://accountingcorner.org - FREE downloads Learn here accounting basic - purchase discounts
Views: 2272 FreeAccountingTutor
Summary of Purchase Returns & Allowances, Discounts, and Transportation Costs
 
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Please like our Facebook page at https://www.facebook.com/rutgersweb To watch the entire video of this lecture, go to https://www.youtube.com/watch?v=ySVzjrPh-J4 To receive additional updates regarding our library please subscribe to our mailing list using the following link: http://rbx.business.rutgers.edu/subscribe.html
Perpetual Inventory System and How to Journalize Purchase Entries (FA Tutorial #30)
 
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75% OFF the Full Crash Course on Udemy: http://bit.ly/2oZIdcP So we've talked about the perpetual inventory for some time now. Well, now its time to learn how to journalize certain transactions in this system like purchases, returns, discounts along with shipping costs (Looking at FOB destination and FOB shipping). Merchandise inventory will be used in this inventory system and will include constant cost of goods sold changes as inventory is sold and returned. Watch the entire tutorial and understand this concept to our inventory chapter! ** Notepirate is privately owned and exclusive to Notepirate.com.** Website: http://www.notepirate.com Follow us on Facebook: https://www.facebook.com/pages/Note-Pirate/514933148520001?ref=hl Follow us on Twitter: http://twitter.com/notepirate We appreciate all of the support you guys have given us. Be apart of the mission to help us reach more students by subscribing, thumbs upping and adding the videos to your favorites!
Views: 53575 Notepirate
Zero Coupon Bond Purchased At Discount Amortization (Bonds Receivable) Accounting
 
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Accounting for a zero coupon bond purchased at a discount (issue price less than face value) and recorded as bond receivable, interest calculation and balance sheet recording, start with a cash flow diagram, face (maturity) value, no stated rate of interest on bond and no interest payments (usually semi-annual), discount the face (maturity) value using the market rate of interest to the issue (purchase) date to determine its present value (purchase price) the difference between the face value (FV) and its present value (PV) equals the discounted amount which equals the profit or expense, the discounted amount has to be amortized to determine the interest receivable and interest revenue recognized, the amortization schedule is calculated as (market rate of interest x beginning carrying value = amortized interest, add to beginning carrying value to determine new carrying (book) value, detailed calculations with balance sheet journal entries for bond receivable, discount bond receivable, interest revenue etc., by Allen Mursau
Views: 1273 Allen Mursau
A035 Purchase Invoice - SQL Accounting Software
 
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This video shows you how to do Purchase Invoice In Purchase Module. Email : [email protected] Product Details :www.syntech.com.my Interaction :www.facebook.com/syntaxtechnologies Full Video Listing :www.youtube.com/syntaxtechnologies
Views: 7381 syntaxtechnologies
Accounting for Discounts and VAT  Part01
 
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Key Topics: • Types of discounts • How to calculate trade and settlement discounts • How to calculate VAT when settlement discount is involved • VAT fraction • Double entry accounting for discounts and VAT Lecture Outcomes: 1. Understand the types of discounts and how to calculate them 2. Brief overview of VAT 3. Understand how to carry out basic VAT calculation 4. Be able to calculate VAT when settlement discount is involved 5. Understand how to calculate VAT from Gross Amount 6. Be able to post discounts and VAT transactions in the general ledger
Views: 3922 HomeiLearn
Tally ERP 9-GST Debit Note Credit Note, Discount Paid Discount Received tally GST (Hindi)Part-7
 
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Learn GST Debit Note, Credit Note in Tally Accounting Entries Accounting Entries with Practical Use of Sales Return, Purchase Return with GST Applicable, 1. How to post Entry when bed Quality Goods received by supplier 2. When goods are different quality and do not match with our ordered quantity 3.Less quantity goods received by supplier 4. when higher priced bill made by supplier debit note & credit note entry in tally, many practical problem and their solution explain in this Hindi tutorial. You can learn all about the concept of credit and debit note in tally erp 9. Also Learn How to Post Discount Received and Discount Paid or Allowed Entries with GST in Tally for Beginners. It is Full Step by Step Tally Tutorial in Hindi. Must watch to master in tally accounting practical approach to work smartly. This Tally Hindi Video Tutorial Based on Advance, Professional, expert Tally courses. It is a Part of RSCFA Course. Watch All Videos on GST Accounting in Tally Day by Day – Part-1- Tally New Version for GST |How to Download and Install Tally for GST https://www.youtube.com/watch?v=SrW5yBYDryA Part-2- GST Accounting Entries in Tally https://www.youtube.com/watch?v=ZHm5GIBlaF4 Part-3- Tally ERP9-GST Accounting Entries for Services in Tally https://www.youtube.com/watch?v=zuebaPA4lqU Part-4-GST Accounting Entries for Reverse Charge on Purchase from Unregistered Dealer in https://www.youtube.com/watch?v=p2eWqPfsf_s Part -5- Multiple Tax Rate Items in Single Invoice GST Accounting Tally https://www.youtube.com/watch?v=YYR99HReFx8 Part-6 HSN Code, GSTIN Number,Multiple Tax Rate Items in Invoice https://www.youtube.com/watch?v=Edm1m5oxrig Visit Our Website: http://www.cpitudaipur.com Visit Our Blog: http://cpitudaipur.blogspot.in/ Like Our Facebook Page: http://facebook.com/cpitudr Please Subscribe to Our Channel https://www.youtube.com/channel/UCSMsxXvvi-7XvygtsMWRBOg -~-~~-~~~-~~-~- Please watch: "Tally ERP 9-GST Entries for Manufacture, Production, Raw Material Consuming in Tally Part-9 (Hindi)" https://www.youtube.com/watch?v=_Pfc1IRTL-k -~-~~-~~~-~~-~-
Purchase Entry In Busy Accounting Software Part 2 With Freight And Cartage Courier Charges Discount
 
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Purchase Entry With Discount and Freight And Cartage This Is Part Two Of Video Series keep Watch all Video Parts
Views: 2804 ABN FAST
Purchasing inventory: periodic and perpetual journal entries
 
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This video explains the differences between the periodic and perpetual methods for recording the purchase, return and payment of inventory. Purchase discounts and terms are also explained. For more help with accounting, please visit my website http://AccountingInFocus.com.
Views: 12020 Kristin Ingram
How to apply discounts in Xero Accounting Software
 
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In Xero accounting software, discounts can be applied against invoice lines or set to a default for contacts. This video tutorial shows you how to apply one-off discounts to sales invoices and how to set up default discounts. Try Xero accounting software for free: http://www.xero.com/signup/
Periodic Inventory (Purchases For Merchandising Operations) Accounting Detailed
 
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Merchandising accounting,how the purchases account (for merchandising operations) is used in the periodic inventory system (periodic inventory method), purchases account is included in net income on the income statement, example details the accounting entries for purchasing transactions, the purchases account and the (contra accounts) purchase discounts and purchase returns and allowances, the example details the periodic inventory system for end of period (year) adjustments to the purchases account, (1) end of period purchase discounts and purchase returns and allowances are closed to purchases account, (2) end of period the purchases account(less returns & discounts) is closed to COGS (cost of goods sold) for the amount of purchases sold, (3) the purchases account is adjusted (purchases net amount - purchases sold = purchases remaining after sales), the purchases remaning gets closed to the inventory account (asset) on the balance sheet which closes out the purchases account such that it starts with a zero balance for the next period (year), in summary purchases account gets closed at end of period, (1) amount sold closed to COGS and (2) amount remaining closed to inventory account on balance sheet, detailed accounting showing transactions on a balance sheet template with (T Accounts) by Allen Mursau
Views: 1459 Allen Mursau
Zero Coupon Bond Issued At Discount Amortization And Accounting Journal Entries
 
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Accounting for a zero coupon bond issued at a discount (issue price less than face value) interest calculation and balance sheet recording, start with a cash flow diagram, face (maturity) value, no stated rate of interest on bond and no interest payments (usually semi-annual), discount the face (maturity) value using the market rate of interest to the issue (purchase) date to determine its present value (purchase price) the difference between the face value (FV) and its present value (PV) equals the discounted amount which equals the profit or expense, the discounted amount has to be amortized to determine the interest payable (receivable) and interest expense (revenue) recognized, the amortization schedule is calculated as (market rate of interest x beginning carrying value = amortized interest, add to beginning carrying value to determine new carrying (book) value, detailed calculations with balance sheet journal entries for bond payable (receivable), discount bond payable (receivable), interest expense (revenue), etc., by Allen Mursau
Views: 5507 Allen Mursau
Income Statement; Gross Profit Percent; Inventory Turnover - Accounting video
 
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Overview of the single step and multi-step income statements as well as a demonstration of the gross profit percentage and the inventory turnover. Part 1 - Operating Cycle, Inventory, Purchase Discount Terms Part 2 - Purchase Discounts and Purchase Returns and Allowances Example Part 3 - Selling Inventory Part 4 - Adjusting and Closing For more accounting/how to eLectures (and accompanying lecture notes), blog and a discount textbook-store visit www.TheAccountingDr.com Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad).
How to Amortize a Bond Discount
 
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This video explains how to account for bonds issued at a discount using the effective interest rate method for bond discount amortization. Edspira is your source for business and financial education. To view the entire video library for free, visit http://www.Edspira.com To like us on Facebook, visit https://www.facebook.com/Edspira Edspira is the creation of Michael McLaughlin, who went from teenage homelessness to a PhD. The goal of Michael's life is to increase access to education so all people can achieve their dreams. To learn more about Michael's story, visit http://www.MichaelMcLaughlin.com To follow Michael on Facebook, visit https://facebook.com/Prof.Michael.McLaughlin To follow Michael on Twitter, visit https://twitter.com/Prof_McLaughlin
Views: 119728 Edspira
How to Calculate Goodwill in M&A Deals and Merger Models
 
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In this tutorial, you’ll learn why Goodwill exists and how to calculate Goodwill in M&A deals and merger models – both simple and more complex/realistic scenarios. https://breakingintowallstreet.com/ "Financial Modeling Training And Career Resources For Aspiring Investment Bankers" Resources: https://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-14-How-to-Calculate-Goodwill-Slides.pdf https://youtube-breakingintowallstreet-com.s3.amazonaws.com/108-14-How-to-Calculate-Goodwill.xlsx Table of Contents: 1:21 Goodwill – Why It Exists and Simple Calculation 6:59 More Realistic Goodwill Calculation 11:47 How to Determine the Percentages in Real Life and Added Complexities 16:07 Recap and Summary Lesson Outline: Goodwill is an accounting construct that exists because Buyers often pay more than the Common Shareholders’ Equity on Seller’s Balance Sheets when acquiring them in M&A deals, which causes the Combined Balance Sheet to go out of balance. By creating Goodwill, we ensure that Assets = Liabilities + Equity. For example, if a Buyer pays $1000 for a Seller, and the Seller has $1500 in Assets, $600 in Liabilities, and $900 in Equity, the Balance Sheet will go out of balance immediately after the deal. If the Buyer spends $1000 in Cash, its Assets side will increase by $500 total ($1500 increase in Assets from the Seller, and $1000 decrease from the Cash usage), and its L&E side will increase by $600 due to the Seller’s Liabilities. Therefore, the Balance Sheet is out of balance by $100, and we fix it by creating $100 of Goodwill on the Assets side. The basic calculation is: Goodwill = Equity Purchase Price – Seller’s Common Shareholders’ Equity + Seller’s Existing Goodwill +/- Other Adjustments to Seller’s Balance Sheet We normally create two Assets to deal with this problem – Other Intangible Assets for specific, identifiable items that have value, such as patents, trademarks, and customer relationships – and Goodwill, which is the “plug” for everything else that ensures balancing. How to Calculate Goodwill in More Detail In all M&A deals, under both IFRS and U.S. GAAP, Buyers are required to re-value everything on the Seller’s Balance Sheet. So, if the Seller’s factories, land, inventory, etc. are worth more or less than their Balance Sheet values, they must be adjusted – and those adjustments will also factor into the Goodwill calculation. Many items that represent timing differences – Deferred Rent, Deferred Tax Liabilities/Assets, etc. – also go away because these temporary differences are reversed and reconciled in M&A deals. Finally, a new Deferred Tax Liability (and sometimes other new items) often gets created in the deal (see our separate video on this one). A real Goodwill calculation might look more like this: Goodwill = Equity Purchase Price – Seller’s Common Shareholders’ Equity + Seller’s Existing Goodwill – Asset Write-Ups + Asset Write-Downs – Liability Write-Downs + Liability Write-Ups If an item increases Assets or reduces L&E, that means less Goodwill is needed to boost Assets – so we subtract that item (this explains why we subtract Asset Write-Ups as well as Liability Write-Downs such as DTLs that get eliminated). To determine the percentages for these write-ups, you could look at the percentages allocated to similar companies that were acquired in this market recently. For example, if we’re acquiring a high-growth software company, we might look at a deal like Atlassian’s $384 million acquisition of Trello and use the percentages allocated to Other Intangibles and the other line items there as a reference. We could use the percentage allocated to Goodwill to check our work at the end as well. Added Complexities in Real-Life Calculating Goodwill in real life gets even more complex because you must deal with items such as Deferred Rent and Deferred Revenue and their possible elimination or write-down, as well as inter-company receivables and payables. Also, the Deferred Tax line items work differently in different deal types (Stock vs. Asset vs. 338(h)(10)). There are different categories of Intangibles, such as Definite vs. Indefinite-Lived ones, and there are also industry-specific items such as In-Place Lease Value and Above/Below-Market Leases in real estate. And don’t forget about Earn-Outs and other Contingent Payments – they show up on the Balance Sheet and also affect Goodwill. All these items follow the same rules; it’s just that you calculate them a bit differently for use in the Goodwill calculation itself.
Merchandising: Closing accounts; Adjusting accounts; Inventory Shrinkage - Accounting video
 
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Discussion on the closing and adjusting of merchandising business accounts and inventory shrinkage Other videos in this series: Part 1 - Operating Cycle, Inventory, Purchase Discount Terms Part 2 - Purchase Discounts and Purchase Returns and Allowances Example Part 3 - Selling Inventory Part 5 - Income Statements and Business Evaluation For more accounting/how to eLectures (and accompanying lecture notes), blog and a discount textbook-store visit www.TheAccountingDr.com Please note that videos may require Flash media and may not play on devices without Flash capabilities (i.e. iPad).
ACCOUNTING EQUATION 3 -  PURCHASE PRICE AFTER TRADE DISCOUNT
 
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ACCOUNTING EQUATION 3 - PURCHASE PRICE AFTER TRADE DISCOUNT
Views: 455 accountants2be
Discount columns in sales invoice in  busy accounting software
 
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how to add discount in sale invoice in busy (hindi) https://youtu.be/CFXKR-B-NDA Discount columns in sales invoice in busy shipping to billed to option in busy accounting software (hindi) https://youtu.be/JcM3Shw0je0
Views: 161 Lady Beetle
Accounting for Purchase of Inventory | Financial Accounting | CPA Exam FAR | Ch 5 P 2
 
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Merchandising operation, purchase of inventory, FOB shipping, FOB destination, perpetual inventory, periodic, purchase discount, purchased invoice, discount terms, net purchased, freight in, purchase returns, purchase allowances, purchased returns and allowances,
Rebate Discount Income Entry In Busy Accounting Software
 
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यहाँ पर हम Rebate Discount की Entry कर रहे है और इस से हमें पता लग जायेगा कब और केसे ये Entry करनी है
Views: 2737 ABN FAST
Financial Accounting: Merchandising Operations
 
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Introduction to Financial Accounting Merchandising Operations (Chapter 5) February 25th, 2013 by Professor Victoria Chiu The main objectives of this lecture is to describe and illustrate merchandising operations & the two main types of inventory systems. We also aim to master how to account for the purchase & sale of inventory using a perpetual system. How to adjust & close the accounts of a merchandising business, as well as preparing merchandisers' financial statements is covered, as well as using the gross profit percentage & inventory turnover to evaluate the health of a business. The operating cycle consists of the company purchasing inventory from the vendor / supplier, & then collects cash by selling the inventory to a customer. Merchandisers are businesses that sell a product to customers. New accounts that they use (that we didn't already cover) include inventory (a current asset account listed on the balance sheet). Inventory is the merchandise that a company holds for sale to customers. Sales revenue and cost of goods sold (type of expense) are also two new accounts we deal with (listed on the income statement). Sales revenue is the retail price of the inventory sold to the customer & cost of goods sold is the cost (to the company) of the inventory sold to the customer. A perpetual inventory system keeps a running computerized record of inventory (thanks to bar codes). A contemporary perpetual inventory system constantly records units purchased & cost amount, the units sold & sales & cost amounts, & the quantity of inventory on hand & its cost. It also better controls inventory due to the fact the inventory & purchasing systems are integrated with accounts receivable & sales. Despite it being computerized, physical counts do occur once every year to double check that the ending inventory listed is the correct amount (since spoilage, theft, & other factors may result in loss of inventory without a sale). The perpetual system is most popular. Bar cods are used by businesses today to streamline many formerly repetitive & labor intensive processes related to inventory. It is used to record sales & cost of goods sold, as well as to update the inventory count. It also updates purchasing & generates purchase orders (replenishes inventory by communicating with the company's purchasing systems). Under the periodic inventory system, goods are counted periodically to determine quantity. Under this system, businesses physically count their inventories periodically to determine the quantities on hand. It is used by small businesses, restaurants, & small retail stores (that lack optical-scanning cash registers). It is normally used for relatively inexpensive goods. However, it is less popular than the perpetual system due to computerized inventory systems being much easier & more convenient to use. When inventory is purchased, the inventory account ( a current asset) is increased with each purchase. The vendor submits an invoice for payment (the seller's request for payment from the buyer). The invoice contains the seller, the purchaser, the date of purchase / shipment, the credit terms, the total amount due, & the due date. It should be noted that the inventory account is also impacted by shipping costs, returned purchased items, & early payment discounts. The journal entry to purchase inventory is simply a debit to the inventory account & a credit to the accounts payable account for the same amount. If purchased with cash rather than with credit, simply credit cash instead of crediting accounts payable. Purchase discounts involve the customer getting a discount for making an early payment within a given period (determined by the seller). For example, the buyer is legible for a 3% discount if the buyer pays for the goods within 15 days. If the buyer does not pay within 15 days, they are responsible for the full amount (within 30 days). The above example would be denoted 3/15, n/30. EOM stands for end of month. Purchase Returns & allowances are also discussed, as well as transportation & freight costs (FOB destination & shipping point). ------QUICK NAVIGATION------ Video begins with overview of learning objectives Operating Cycle: 3:31 Merchandisers: 6:11 Balance Sheet Diff: 10:18 Income Statement Diff: 10:59 Perpetual Inventory System: 12:59 Bar Codes: 16:19 Periodic Inventory System: 17:35 Purchasing Inventory: 20:03 Journal Entry for Purchase of Inventory: 22:53 Purchase Discounts: 24:46 Payment Within Discount Period: 29:53 Purchase Returns and Allowances: 34:23 Journal Entry for Purchase Returns & Allowances: 37:34 Transportation Costs: 40:22 FOB Shipping Point: 45:20 Purchase Discount - Shipping is Added to Invoice: 46:06 FOB Destination: 49:56 Summary of Purchase Returns & Allowances, Discounts, & Transportation Costs: 52:53 Exercise S5-2 - (Analyzing Purchase Transactions - Perpetual Inventory): 55:50 Midterm Review: 1:04:54
Views: 34855 Rutgers Accounting Web
Xero Accounting Tutorial #6 - Recording Supplier (Purchase) Invoices
 
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This video demonstrates how to record supplier/purchase invoices on Xero Accounting Software. This is the 6th video in my Xero training course. Next lesson https://www.youtube.com/watch?v=3HYcw2D8fLk Create a bookkeeping spreadsheet using Microsoft Excel http://youtu.be/LlWADbkGdac 30 Free Day Trial on KashFlow Accounting Software http://www.kashflow.com/?code=AFF2105084 Free Bookkeeping and Accounting Course https://www.youtube.com/watch?v=IhYJbCAcCKE&feature=c4-overview&list=UUgPrg8qyvKaiED9tvdAIfpQ Try Crunch Accounting Software! http://www.crunch.co.uk/?aid=samuel3a Learn more at www.freebookkeepingaccounting.com
Views: 25910 BookkeepingMaster
Effect of Inventory Methods on Financial Statements | Financial Accounting | CPA Exam FAR | Ch 6 P 3
 
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FIFO, LIFO, Weighted average, specific identification, First in first out, Last in first out, Merchandising operation, purchase of inventory, FOB shipping, FOB destination, perpetual inventory, periodic, purchase discount, purchased invoice, discount terms, net purchased, freight in, purchase returns, purchase allowances, purchased returns and allowances, Consistency, Disclosure, Materiality, Accounting conservatism
debid note discount on purchase entry tally accounting hindi PAONE
 
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debid note discount on purchase entry tally accounting hindi from PAONE
Views: 16 PAONE GS path
Principles of Accounting - Lecture  14 - Merchandising Example
 
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wholesaler, sales revenue, COGS, operating cycle, merchandise inventory, FOB, delivery expenses, EOM = End of Month, purchase discount terms, overstatement of inventory,
Views: 12809 Krassimir Petrov
Accounting Entry for Credit Purchase
 
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Did you liked this video lecture? Then please check out the complete course related to this lecture, ACCOUNTING BASICS A COMPLETE STUDY with 300+ Lectures, 28+ hours content available at discounted price (only Rs.640)with life time validity and certificate of completion. https://www.udemy.com/fundamentals-of-accounting-a-complete-study/?couponCode=YTBABCS57 ---------------------------------------------------------------------------------------------------------------- Welcome to one of the comprehensive ever course on Accounting Basics. This course starts from “What is Accounting”, “Need for Accounting” to various Practical aspects in Accounting. Enjoy lectures for each and every concept in accounting presented in digital hand written format followed by Solved Case Studies Video. New videos are being added at frequent intervals and this course will be the longest one in Accounting soon. ---------------------------------------------------------------------------------------------------------------- Welcome to Accounting Basics - A Complete Study Course! This is one of the comprehensive course in Fundamentals of Accounting covering theory as well as practice. In this course, you will learn Fundamentals of Accounting, step by step covering the following: Section 1: a) Introduction to Accounting; b) Book Keeping; c) Accounting – Objectives and Process; d) Accounting Cycle; e) Accountancy, Accounting and Book Keeping; f) Users of Accounting Information; g) Branches of Accounting; h) Basic Accounting Terms; i) Basic Assumptions in Accounting; j) Basic Concepts in Accounting; k) Modifying Principles of Accounting; l) Accounting Standards; Section 2: m) Double Entry System in Accounting; n) Accounting Equation; o) Golden Rules of Accounting; Section 3: p) Source Documents; q) Cash Memo; r) Invoice; s) Receipt; t) Debit Note; u) Credit Note; v) Pay in Slip; w) Cheque; x) Vouchers; Section 4: y) Books of Original Entry; z) Journal and Format aa) Steps in Journalising; bb) Journal Illustrations; cc) Compound Journal Entry; Section 5: dd) Ledger; ee) Utility of Ledger; ff) Format of Ledger; gg) Posting; hh) Procedure for Posting; ii) Posting of Compound Journal Entry; jj) Posting the Opening Entry; kk) Balancing an Account; ll) Significance of Balancing; mm) Balancing of Different Accounts; nn) Procedure for Balancing; Section 6 - covering Trial Balance and Final Accounts. This course is structured in self paced learning style. Video lectures are used for delivering the course content. Take this course to create strong foundation in fundamentals of accountancy. • Category: Business What's in the Course? 1. Over 206 lectures and 20 hours of content! 2. Understand need and importance of Accounting 3. Understand Book Keeping, Objectives and Advantages 4. Understand Accounting Process, Accounting Cycle, 5. Understand Users of Accounting Information 6. Understand Branches of Accounting 7. Understand Basic Accounting Terms 8. Understand Accounting Assumptions, Concepts and Principles 9. Understand Rules of Accounting 10. Understand Journal, Ledger, Trial Balance and Final Accounts Preparation Course Requirements: 1. No basic knowledge is required 2. Students can approach this course with fresh mind Who Should Attend? 1. Any one interested in Learning Accountancy 2. Accounting / Finance / Science Students 3. Entrepreneurs
Views: 21062 CARAJACLASSES
Tally ERP9-GST Accounting Entries for Services in Tally (Hindi) Part-3|GST for Service Purchase Sold
 
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Learn How to post GST Accounting Entries for services in Tally ERP 9. Service Purchase and Service Sold, How to create service ledgers for GST implementation in tally, How to Create GST Ledgers or Master Such as Interstate Service Purchase, Local Service Purchase, Interstate Service Sales, Local Service Sales, Sundry Creditors, Debtors Interstate or Local, GST Tax Ledgers IGST, CGST, SGST. How to Set Service wise GST Rates, How to Post Purchase and Sales Entry using GST. How to Paid Tax Liability to Government i.e. How to Check Input Tax Credit under GST. learn gst accounting entries for accounts only without inventory without stock. We are using Tally for GST Implementation, Learn All about Goods and Service tax practical accounting entries in tally, how to enable GST in tally, how to set GSTIN also learn the Tax Adjustment and payment method in this video Hindi Tutorial. Watch to learn Step by Step Full GST accounting entries in tally in Hindi Video Tutorial. Thanks for Watching!!! Have a Nice Day! 👉Watch All Videos on GST Accounting in Tally Day by Day – Part-1- Tally New Version for GST (Hindi) |How to Download and Install Tally for GST https://www.youtube.com/watch?v=SrW5yBYDryA 👉Part-2- GST Accounting Entries in Tally (Hindi) Part-2 https://www.youtube.com/watch?v=ZHm5GIBlaF4 👉Watch All other videos Day by Day ::- Day-1 Complete Basic Accounting Class with Example|Journal Entry in Tally https://www.youtube.com/watch?v=vZQGxkommug&list=PLlDtUyWdJwXXx8VkVuPoRuqbVJzOBj9Cv&index=1 👉Day-2 INTRODUCTION to TALLY ERP 9 https://www.youtube.com/watch?v=XCszfm-6nBY&t=1s 👉Day-3 Company Creation, Alteration, Tally Password https://www.youtube.com/watch?v=pqLoH8ObJ_M 👉Day-4 Concept of Groups in Tally https://www.youtube.com/watch?v=6wi9BGM4iLA 👉Day-5 How to Create Ledgers- https://www.youtube.com/watch?v=Cb6QLeXs_OU 👉Day-6 Voucher Entry -Contra, Payment, Receipt, Journal, Sales, Purchase Voucher https://www.youtube.com/watch?v=tGX9iZSWu9I 👉Day 7- Watch All Bank Transaction Entries in Tally- https://www.youtube.com/watch?v=QV1M0ALJPOA 👉Day 8- Discount Related Entries in Tally | Cash or Trade Discount | All About Discount Tally https://www.youtube.com/watch?v=AfMlAyxw3j8&index=8&list=PLlDtUyWdJwXXx8VkVuPoRuqbVJzOBj9Cv&t=25s 👉Day-9- Basic Adjustment Entries|Journal Voucher Entries https://www.youtube.com/watch?v=IYBoqln8uK4&index=9&list=PLlDtUyWdJwXXx8VkVuPoRuqbVJzOBj9Cv&t=25s 👉DAY-10- Common Tally Problems Dr/ Cr Mode|Single Payment Modehttps://www.youtube.com/watch?v=43azz8FC89A&index=10&list=PLlDtUyWdJwXXx8VkVuPoRuqbVJzOBj9Cv 👉Visit Our Website: https://cpitudaipur.com 👉Visit Our Blog: https://cpitudaipur.blogspot.in/ 👉Like Our Facebook Page: https://facebook.com/cpitudr 👉Please Subscribe to Our Channel https://www.youtube.com/channel/UCSMsxXvvi-7XvygtsMWRBOg 👉Please watch: "Tally ERP 9-GST Entries for Manufacture, Production, Raw Material Consuming in Tally Part-9 (Hindi)" https://www.youtube.com/watch?v=_Pfc1IRTL-k
Accounting for Sales Transaction using Perpetual Inventory Financial Accounting CPA Exam FAR
 
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Webiste: www.farhatlectures.com Like us on Facebook: https://www.facebook.com/accountinglectures Visit the website where you can search using a specific term: http://www.farhatlectures.org/ Connect with Linked In: https://www.linkedin.com/in/mansour-farhat-cpa-cia-cfe-macc-2453423a/ III. Accounting for Merchandise Sales—involves sales, sales discount, sales returns and allowances and cost of goods sold A. Each sale of merchandise transaction involves two parts (resulting in two journal entries; the revenue entry and the cost entry. 1. Recognize revenue—debit Accounts Receivable (or cash), credit Sales (both for the invoice amount). 2. Recognize cost—debit Cost of Goods Sold, credit Inventory (both for the cost of the inventory sold). C. Sales without Cash Discounts – Revenue side: Inflow of Assets. Debit Accounts Receivable (or Cash) and credit Sales. Cost side: Outflow of Assets: debit Cost of Goods Sold and credit Inventory. B. Sales with Cash Discounts – 1. Sales on Credit: revenue side using the gross method is a debit Accounts Receivable and a credit Sales. 2. Buyer Pays within Discount Period: debit Cash (invoice amount minus discount), debit Sales Discounts (discount amount), credit Accounts Receivable (full invoice amount). 3. Buyer Pays after discount period—debit Cash, Credit Accounts Receivable (full invoice amount). 4. Sales Discounts is a contra-revenue account—subtraction from Sales. C. Sales with Returns and Allowances 1. Sales returns—merchandise that a customer returned to the seller after a sale. 2. Sales allowances—reductions in selling price of merchandise sold to customers (usually for damaged merchandise that a customer is willing to keep at a reduced price). Chapter Outline 3. Returns Received by Seller. Seller issues refund for returned goods. Entry: debit Sales Returns and Allowances and credit Cash; additional entry to restore cost of returned goods to inventory if merchandise is returned and it is salable: debit Inventory, credit Cost of Goods Sold. 4. Seller receives returned goods into inventory: seller also reduces cost of sales. 5. Return goods not defective: if inventory can be resold, seller debits Inventory and credits Cost of Goods Sold. 6. Returned Goods are defective: debit Inventory for estimated value; debit Loss from Defective Merchandise (difference between cost and estimated value) and credit Cost of Goods Sold (for cost). 7. Sales Returns and Allowances is a contra-revenue account that is subtracted from Sales. 8. Credit Memorandum—issued by the seller to inform buyer of a credit made to buyer’s Accounts Receivable in seller’s books. 9. Allowances Granted by Seller: merchandise which is defective but buyer decides to keep it, seller will record a debit to Sales Returns and Allowances and a credit to Cash for the reduction in price. If seller has not yet collected cash for goods sold, seller could credit buyer’s Accounts Receivable.
Financial Statements--Merchandising Company | Intermediate Accounting | CPA Exam FAR | Chp 3 p 7
 
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Posting The next step in the accounting cycle involves transferring amounts entered in the journal to the general ledger. The ledger is a book that usually contains a separate page for each account. Transferring amounts from a journal to the ledger is called posting. Transactions recorded in a general journal must be posted individually, whereas entries made in specialized journals are generally posted by columnar total. Trial Balance 9. The next step in the accounting cycle is the preparation of a trial balance. A trial balance is a list of accounts and their balances at a given time. An entity may prepare a trial balance at any time in the accounting cycle. A trial balance prepared after posting has been completed serves to check the mechanical accuracy of the posting process and provides a listing of accounts to be used in preparing financial statements. Adjusting Entries 10. (L.O. 3) Preparation of adjusting journal entries is the next step in the accounting cycle. Adjusting entries are entries made at the end of accounting period to bring all accounts up to date on an accrual accounting basis so that correct financial statements can be prepared. Adjusting entries are necessary to achieve a proper matching of revenues and expenses in the determination of net income for the current period and to achieve an accurate statement of the assets and equities existing at the end of the period. One common characteristic of adjusting entries is that they affect at least one real account (asset or liability account) and one nominal account (revenue or expense account). Adjusting entries can be classified as: (1) deferrals (prepaid expenses, unearned revenues), or (2) accruals (accrued revenues, accrued expenses). 11. Prepaid expenses and unearned revenues refer to situations where cash has been paid or received but the corresponding expense or revenue will not be recognized until a future period. Accrued revenues and accrued expenses are revenues and expenses recognized in the current period for which the corresponding payment or receipt of cash is to occur in a future period. Adjusted Trial Balance 12. After adjusting entries are recorded and posted, an adjusted trial balance is prepared. It shows the balance of all accounts at the end of the accounting period. Financial Statements 13. (L.O. 4) From the adjusted trial balance, a company can directly prepare its financial statements. Closing Process 14. (L.O. 5 After financial statements have been prepared, nominal (revenue and expense) accounts should be reduced to zero in preparation for recording the transactions of the next period. This closing process requires recording and posting of closing entries. All nominal accounts are reduced to zero by closing them through the Income Summary account. The net balance in the Income Summary account is equal to net income or net loss for the period. The net income or net loss for the period is transferred to an owners’ equity account by closing the Income Summary account to Retained Earnings. Sales revenues, cost of goods sold, gross profit, CPA exam, sales returns and allowance, sales discount, Multiple step income statement, gross profit percentage, closing Lower of cost or market, LCM, Accounting conservatism FIFO, LIFO, Weighted average, specific identification, First in first out, Last in first out, Merchandising operation, purchase of inventory, FOB shipping, FOB destination, perpetual inventory, periodic, purchase discount, purchased invoice, discount terms, net purchased, freight in, purchase returns, purchase allowances, purchased returns and allowances, Consistency, Disclosure, Materiality, Inventory overstated, inventory understated, cost of goods sold overstated, cost of goods sold understated
Inventory Errors | Inventory Valuation | Intermediate Accounting | CPA Exam FAR | Chp 8 p 2
 
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inventory errors, inventory turnover, LCM, lower of cost or market, FIFO, LIFO, Weighted average, specific identification, First in first out, Last in first out, Merchandising operation, purchase of inventory, FOB shipping, FOB destination, perpetual inventory, periodic, purchase discount, purchased invoice, discount terms, net purchased, freight in, purchase returns, purchase allowances, purchased returns and allowances, Consistency, Disclosure, Materiality, Accounting conservatism